S ALAMELU Vs. GEO PICTURES

JUDGEMENT

(1.) THIS petition is filed by the petitioning creditor under Secs.9(d)(ii) and (iii), 9(g), 10, 11(b), 12 and 13 of the Presidency Towns Insolvency Act to adjudicate the debtors as insolvents.

(2.) THE facts which led to the filing of this petition may be briefly summarised as follows: - THE 1st respondent-firm, Geo Pictures, represented by its partner, the 2nd respondent, borrowed a sum of Rs.1,50,000 from the petitioning creditor by discounting three cheques for Rs.50,000 each, dated 14th August, 1983, 18th August, 1983 and 9th September, 1983, drawn on the South Indian Bank Limited, Madras-2. THE above three cheques were discounted by the firm represented by the Managing partner Mr.N.G.John. THE said N.G.John got himself adjudicated as insolvent on his own petition in I.P.No.61 of 1984. THE other partner of the firm namely, Alayamma and two other minor partners are not adjudicated as insolvents. It is further alleged that the 1st respondent firm was postponing payment and requesting the petitioning creditors not to present the cheques for payment and paying interest upto September, 1984. THE amounts due under those cheques are due from the 1st respondent firm. It is further alleged that the debtors have borrowed heavily from various other persons and that they are not in a position to pay those debts. THEy gave notice of suspension of payment to the creditors through its Manager Jacob orally with intent to delay and defeat the creditors and the 2nd respondent is making herself scarce from the business premises since 16th November, 1984. Hence they committed acts of insolvency within the meaning of Secs.9(g) and 9(d) of the Presidency Towns Insolvency Act.

(3.) ON the side of the petitioning creditor, two witnesses were examined as P.Ws.1 and 2 to establish the acts of insolvency and Exs.P1 to P4 were marked. P.W.1 is a clerk of the petitioning creditor. He has stated that he knew the transaction between the petitioner and the respondents and that the respondents borrowed Rs.1,50,000 under promissory note, that the respondents issued three cheques, that the Manager Jacob told him that they suspended payment and that they would receive notice. He has also stated that the 2nd respondent went to the village since the creditors were pressing. P.W.2, a financier, was examined and he deposed that he had dealings with the Geo Pictures, namely, the 1st respondent firm and they have to pay him a sum of Rs.1,00,000. According to him, his wife T.Meenakshi filed a suit for recovery of Rs.25,000 and interest against the 1st respondent firm. He has stated that he used to talk to the 2nd respondent, over phone and he had not seen her in person and that the Manager of the second respondent Mr.Jacob and Mr.N.G.John told him about the suspension of payment to the creditors and that even then the business is being carried on by Jacob under instructions from John. ON the side of the respondents, R.W.1 Jacob, was examined and Exs.R1 and R2 were marked. It is the evidence of R.W.1 that he was employed during November, 1984 under Geo Movie Productions (P) Ltd., at No.l, Ghuhan Str.eet, Madras and that he was never under the employment of the 1st respondent or any other company during that period. He further stated that he does not know Alamelu, the petitioning creditor and on 16th November, 1984, he was not in Madras, since he left for Kerala on the 15th evening. He denied having made any statement to the petitioning creditor that the 1st respondent firm is unable to pay any amount to the creditors.